PRESS RELEASE

A.M. Best Affirms Credit Ratings of Seguros Inbursa S.A. Grupo Financiero Inbursa

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Wednesday, September 12, 2018

Press release by A.M. Best

MEXICO CITY, September 12, 2018 - A.M. Best has affirmed the Financial Strength Rating of A (Excellent), the Long-Term Issuer Credit Rating of "a+" and the Mexico National Scale Rating (NSR) of "aaa.MX" of Seguros Inbursa S.A. Grupo Financiero Inbursa (Seguros Inbursa) (Mexico). The outlook of these Credit Ratings (ratings) is stable.

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The ratings reflect Seguros Inbursa's balance sheet strength, which A.M. Best categorizes as strongest, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.

Seguros Inbursa's balance sheet strength is underpinned by its risk-adjusted capitalization at the strongest level, as measured by Best's Capital Adequacy Ratio (BCAR). The ratings also reflect its strong operating performance driven by consistent profitability mainly supported on a stable flow of investment income, as well as low underwriting leverage, a diversified business profile and the company's affiliation with Grupo Financiero Inbursa S.A.B. de C.V. (Grupo Financiero Inbursa), one of the largest financial groups in Mexico.

Seguros Inbursa writes life and non-life business, and remains one of the largest and most profitable domestic insurance companies in Mexico. In 2017, individual life and earthquake were among the company's most profitable business lines, currently representing 23.32% and 9.17% of gross written premiums, respectively. The company has shown disciplined underwriting in a highly competitive market, consistently reporting overall premium sufficiency levels that compare positively among its closest competitors. Seguros Inbursa maintained high claims volume in 2017; however, the company's strong underwriting policies have helped to maintain its combined ratio below the 100% threshold, standing at 95.4% in 2017. A.M. Best expects the company's current underwriting performance to continue in 2018.

Historically, Seguros Inbursa has operated with low underwriting leverage. The company's risk-based capitalization remains fully supportive of its current ratings. Adjusted capital has grown at a compound annual growth rate of 9.7% during the past five years, and A.M. Best expects this trend to continue as a result of sound underwriting, conservative reserves, and dividends and investment policies, as well as an effective cost containment strategy. In addition, Seguros Inbursa continues to benefit from significant operating efficiencies afforded by Grupo Financiero Inbursa's vast financial and system networks.

Partially offsetting these positive rating factors is the strong competitive environment in Mexico's insurance market, which A.M. Best believes could pressure the company's profitability and market share.

Key rating drivers that could lead to positive rating actions for Seguros Inbursa include continued favorable trends in profitability and capital growth. Conversely, sharp deterioration in underwriting results or a significant weakening of its risk-adjusted capitalization, as measured by Best's Capital Adequacy Model, could trigger negative rating actions.

The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.